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Magic Internet Money [MIM] is a stablecoin soft-pegged to the US dollar and minted by the money lending platform Abracadabra. Owing to the current market upheaval that has capsized the stablecoin projects, the asset is too on the verge of near insolvency.
Market observer Autism Capital released a series of tweets detailing what went wrong. First, during the Terra fallout, the protocol behind MIM- Abracadabra created a bad debt of $12 million to cover the protocol’s MIM liabilities.
Abracadabra reportedly took down their analytics dashboard to “upgrade” it which Autism Capital found odd.
The analyst then accused the MIM core team of failing to pay back the bad debt out of the MIM treasury and resorting to buying CRV instead. The price of CRV has been in a downward spiral and there is no way to check the bad debt trapped in the protocol with the dashboard down, it alleged.
We’re concerned that the protocol could become insolvent, either through the MIM treasury continuing to dump in value or more bad debt created. At that point, the rational thing to do for any MIM holder is to dump it, as the last person holding the bag would get nothing back.
MIM is not the latest stablecoin to de-peg in the ongoing crypto crash. As reported by TronWeekly, TRON [TRX] and WAVES algorithmic stablecoins projects- USDD and USDN too lost their peg.
Stablecoins’ Future Looks Bleak?
Looking at the rate at which these assets class are mired with near insolvency, it is uncertain what lies ahead for those projects. To add to that, recently Dogecoin’s co-founder Billy Marcus made a controversial statement that 95% of the cryptocurrency projects are scams.
Through his Twitter handle, Billy Markus, co-founder of DOGE said, “the reason why people think crypto is 95% scams and garbage and most crypto people are assholes is that crypto is 95% scams and garbage and most crypto people are assholes.”
Adding, “Let’s change that. it starts with you – what you support, and how you behave.”
Elon Musk, a well-known DOGE advocate replied back with a laughing emoji. Following the crypto crash, Doge has fallen by over 65% in less than 2 months.